European Stocks Sink as Greek Crisis Imminent; Automakers Fall

European stocks were lower on Tuesday as investors continued to fret about a Greek debt default and as Federal Reserve policy makers prepared to start a two-day meeting.

LONDON (TheDeal) -- European stocks were lower on Tuesday as investors continued to fret about a Greek debt default and as Federal Reserve policy makers prepared to start a two-day meeting.

In London, the FTSE 100 fell 0.45% to 6,680.23. In Frankfurt, the DAX fell 1.13% to 10,860.57. In Paris, the CAC 40 gave up 0.81% to 4,774.51. The Athens Stock Exchange index was down 2.27%

Attitudes have recently hardened at opposing factions in the debt talks, with the Greece's finance minister reportedly telling a German newspaper that he won't present a new reform proposal at a Thursday meeting with his eurozone peers.

Greece needs €7.2 billion ($8.1 billion) of bailout funding. It must repay €1.5 billion owed to the International Monetary Fund in two weeks' time, but won't undertake the pension and other reforms demanded by its creditors. European Central Bank President Mario Draghi said on Monday the "ball lies squarely in Greece's court," while Greek Prime Minister Alexis Tsipras accused creditors of "pillaging" the Mediterranean nation. Reports suggest eurozone leaders may hold an emergency weekend summit if Thursday's meeting yields no breakthrough.

On mainland Europe, analysts and investors' economic sentiment, as measured by the ZEW research institute, came in well below expectations in June in separate surveys for the eurozone and Germany.

In London, Royal Mail (ROYMF) fell after the U.K.'s media and communications regulator Ofcom said it will examine regulation of the former monopoly postal service to ensure the system in place "remains appropriate and sufficient to secure the universal postal service" after a letter-delivery competitor went bankrupt.

Homebuilder Crest Nicholson Holdings also fell after posting strong first-half revenue and earnings growth. It said the pace of earnings growth for the full year would slow to 20% to 25%, as measured by earnings per share, from 51% in the first half.

Whitbread (WTBCF) had largely erased initial losses by late morning after posting a below-forecast 4.3% increase in first-quarter same-store sales as growth slowed at its pub-restaurants. Overall sales rose 12.5% with its Costa Coffee chain remaining one of its star formats.

Temporary power generator maker APR Energy (APRYY) plunged more than 30% after warning that full-year profit will be significantly lower than expectations and that it may breach debt covenants.

Both British American Tobacco (BTI) and Imperial Tobacco (ITYBY) benefited from Credit Suisse upgrades.